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Tax fraud charges filed against Quebec tax protester

MONTREAL, May 21, 2014 /CNW Telbec/ - The Canada Revenue Agency (CRA) reported today that tax fraud charges and charges under the Criminal Code were filed against Christian Lachapelle, a resident of Nicolet. He is alleged to have recruited 93 other individuals to avoid or try to avoid paying nearly $2 million in income tax. An arrest warrant has also been issued for Lachapelle in anticipation of his appearance before a Court of Quebec judge in Sherbrooke to answer to the charges filed against him.

The activities for which Christian Lachapelle has been charged are alleged to have occurred between June 2007 and February 2011 inclusively, and include allegations that he helped other individuals to evade or try to evade taxes as part of a tax protest scheme that made a distinction between a "natural" person and a "legal" person.

In 2012, this individual was sentenced to fines and a prison sentence for not filing income tax and benefit returns, despite a court order.

The information in this release is publicly available from court records.

Tax protestor schemes attempt to promote the argument that there are two distinct persons for tax purposes: the legal person, who is subject to filing an income tax and benefits return; and the "natural person", to whom income belongs and who is not taxable. Canadian courts have consistently rejected the "natural person" argument often used by tax protesters to avoid paying income tax.

The CRA continues to work diligently to identify tax schemes such as the tax protester movement. The CRA will assess and may reassess the income tax and benefit returns of people who have participated in or promoted such tax schemes. In certain cases, based on the evidence, the CRA will recommend legal action. More information on tax protester schemes is available at www.cra.gc.ca/alert.

Taxpayers who have not filed returns for previous years, or who have not reported all of their income, can still voluntarily correct their tax affairs. They may not be penalized or prosecuted if they make a valid disclosure before they become aware that the CRA is taking compliance action against them. These taxpayers may only have to pay the taxes owing, plus interest. Information on the Voluntary Disclosures Program can be found on the CRA's website at www.cra.gc.ca/voluntarydisclosures.